Research Report by VIJAY KUMAR FDDI, NOIDA, INDIA

MEASURING IMPACT OF ORGANISED RETAIL
ON FOOD PROCESSING INDUSTRY
A Research Report is submitted to the faculty of

MARKETING RESEARCH, Centre for retail Management, FDDI
In Partial fulfillment Requirement of PGDRM course (2007-09)
SUBMITTED BY: SUBMITTED TO:
(51)Vijay Kumar Mr Shashank Mehra

F.M.R.
CRM, FDDI
FDDI(NOIDA)
(center for retail management)
(ministry of commerce, GOVT. OF INDIA)
1
THE LETTER OF AUTHORIZATION
As per the integral part of the Marketing Research subject, we have undertaken
Projects to conduct a research on measuring the impact of organize
retail on food processing industry.
This research covers major section of our
learning process and covers all the data and information collected
which is authentic & going to be used exclusively for academic purpose
only.
Therefore our respectful faculty of Marketing Research “Mr. Shashank

Mehra” has authorized this project and hence all the steps undertaken
by us were as per his specific guidelines and directions.
Authorized By:
Mr. Shashank Mehra

(Faculty of Marketing Research)
2
LETTER/MEMO OF TRANSMITTAL
May 01, 2008

Mr. Shashank Mehra,
Faculty Centre For Retail Management,
FDDI, Noida.
Respected Sir,
As, per the area and objective of our research and authority received from
you we have now completed the investigation on various factors effecting
food production and distribution. The result of our research is contained in
this Report entitled “Impact Of organized retail on food processing
industry”. This report is based on the data collected through
questionnaires both from retailers & farmers. The methodology adopted is
described in the report and the relevant research practices were used in the
conduct of the study. We believe that the result to be valid and reliable
within the constraints as defined in the report. We also believe that as per
guidelines and specifications received, you will find the report interesting
as well as an addition to the on going research on the concerned field
which will bring new opportunities for future research.
Your’s Sincerely,
Vijay kumar
PGDRM,
Centre for Retail Management,
3
TABLE OF CONTENTS OF RESEARCH REPORT
Section Title Page No.
1. Executive Summery 7
• Major findings
• Conclusions
• Recommendation
2. Introduction 9
• Some Facts 10
• Background 11
3. Objective of the study 12
4. Research Design 16
5. Methodology 17-19
• Population definition 17
• The sample plan 17
• The sample size 18
• Development of the survey questionnaire 18
• Collecting the data 18
• The response rate 19
• Statistical technique used 19
4
6. Analysis of result 20-42
• A profile of the total sample 20
a) Retailers
b) Farmers
• Analysis of retailer response 21-31

• Analysis of farmer response 32-42
7. Limitations of the study 43
8. Conclusion and recommendations 44
• Conclusions 44
• Strategic recommendations 45
9. End matter (appendixes) 46-73
• Questionnaire 46-51
a) Retailers 46-48
b) Farmers 49-51
• Frequency tables 52-73

a) Retailers 52-62
b) Farmer 63-73
10. Bibliography & references 74
5
EXECUTIVE SUMMARY
MAJOR FINDINGS:
As per the area of research undertaken by us i.e..,” IMPACT OF

ORGANISED RETAIL ON FOOD PROCESSING INDUSTRY” the major
findings are also divided into two parts-
• In term of retailer.
• In term of farmer
Retailer-
Major findings that came into being after conducting a research on retailer
are:-
• Most of the organized retailers are of the thought that direct tie-up
between farmers and retailers will ultimately going to help them both in a
big way.
• Above all it will also help in controlling black marketing and inflation.
• In terms of strategy for selling most of the retailers feels it is better to go
with a push oriented strategy.
Farmers-
Major findings derived through farmers are:-
• Majority of the farmers feels that current supply chain needs to be vastly
improved and transportation is the one factor that needs maximum
attention.
• Farmers want minimum number of intermediaries in terms of supply chain.
And they think technology can be very helpful in increasing Agro output.
• As like the retailers, farmers also feels that direct dealing with Big retailers
could be helpful in reducing price and wastages.
6
CONCLUSIONS:
As per the research undertaken & the result derived with in the available
constraints it can be concluded that:-
• Organized retail is acting as a catalyst for food processing industry right

from farmers to processor to retailers.
• Tie-ups between farmers and retailers are really going to help them both
term of efficiency and productivity.
• Supply chain needs to be vastly improved in terms of storage,
transportation and value addition.
RECOMMENDATION:
• Govt should play a pro active role in building the supply chain
infrastructures like cold storages and warehouses besides that they should
made the policies friendly to both farmers and retailers.
• Organized retailers should help farmers and processors or provide them
with the technical know-how of the food processing industry because it is
ultimately going to pay them back in term of getting good and fast food.
7
INTRODUCTION
India is world’s second largest food producers and can double the food’s
production in next 10 years. In India growing retail appetite, the food sector
stands out to be the most promising one. Retail segment has opened up
opportunities for processed food products in the country. Indian food industry is
full of small players at each level of food chain. Large supply integrator, chain
retailers and cooperatives that have actively driven the development of food
chains in developed economies are missing in India. But now because of Indian
economy is growing at a stupendous pace. Rising income leading to higher
household spending on a variety of goods and services consumers are spending as
never before especially on food. Urbanization and nuclear families too forces
consumer to seek convenience food like ready to cook or ready to eat food. As
demand for quality food expands, large corporate have began to make
investments in retail chains and food processing like Nestle India Ltd., ITC Agro
etc. The entry of so many professionally managed business houses will raise the
standard of customer service, improve category management and make sourcing
more efficient. Food supplies to retail chains are required to be processed and
package as also delivered at a reasonable cost investment in food processing
happens once retail chains expands investment will also flow into warehousing to
reduce wastages of perishable goods it also helps in developing existing food
products and design processes to attain the best quality and safety.
Indian economy is growing at a rapid rate of 9% with that income level of

common man is also rising. Rising income level means more spending power and
lifestyle and convenience shopping. This concept is fueling the organized retail
industry, which has a direct connection of dependence on food processing
industry. Food processors give retailers and wholesalers the food and the
beverages product they want, where they want and when they want with the
packaging they prefer. Food processing industry has to nurture further by
developing a demand oriented approach that is implementing just-in-time
approach to achieved higher customer satisfaction and reduce wastages and
excess inventories which in turn reduces cost for both commodities in warehouse
space, ultimately increasing productivity.
8
INDIA’S FOOD PRODUCTION: SOME FACTS
India with arable land of 184 million hectares.
India produces annually 90 million tones of milk (highest in the world)
India produces 150 million tones of fruits & vegetables (second largest)
India has 485 million livestock population (largest)
India produces 204 million tones food grain (third largest)
India produces 6.3 million tones fish (3rd largest),
India has 489 million Poultry and produces 45,200 million eggs.
India had the “Green” Revolution, the “White” Revolution, and the “Blue”
Revolution,
And now the focus is on the “Pink Revolution”.
The Green Revolution had led to self-sufficiency in food grains, the White
Revolution
Saw India occupy the Number One Position in milk production in the world, and the
Blue Revolution brought about increase in fish production.
Processed fruits & vegetable:
India is the world’s second largest producer of fruits and vegetables. The huge
production base needs to be supported by strong food processing industry. Currently
in India the processing level is estimated to be around 2.20 %.The major items of the
Indian fruits and vegetable processing industry are pulps Particularly of tomatoes &
mangoes, ready to serve juices, canned fruits, jam, Pickles, squashes, etc.Frozen fruits,
dehydrated & freeze dried vegetables, canned mushrooms etc. are also becoming
popular among Indian consumers. The fruit and vegetable processing industry in India
is highly decentralized with large number of units is in the cottage/home scale
9
And small scale sector. According to Ministry of Food Processing the installed
capacity of fruits and Vegetables processing industry has increased from 11.08 lakh
tons in January 1993 to 21.18 lakh tons in January 2006. The utilization of fruits
and vegetables for Processing is estimated to be around 2.20 percent of the total
production.
RATIONALE
India can become the food supplier of the world. It has the cultivable land, all the
seasons for production of all varieties of fruits and vegetables, an agribusiness system
that works although it needs to be vastly improved. The single most important problem
facing the Indian agricultural industry is the highly inefficient supply chain. Because
of lack of cold chain infrastructure and also a food processing industry about 20% of
all foods produced in India (Rs.500b) are wasted. By building an efficient and
effective supply chain using state of the art techniques it is possible to serve the
population with value added food while simultaneously ensuring remunerative prices
to the farmers. The surplus of cereals, fruits, vegetables, milk, fish, meat and poultry
can be processed as value added food products and marketed aggressively both locally
and internationally. Investment in cold chain infrastructure, applied research in post
harvest technologies, installation of food processing plants in various sectors and
development of food retailing sector are mandatory for achieving gains in this sector.
Indian food processing industry logging an impressive growth rate of 18% up from 8%
in 2004. Food processing industry employs around 15 million people with a turn
over of 70 billion dollar per year by 2010 industry is expected to be worth 150 billion
dollars. India has a potential to be the food basket of the world it has large raw
material base and varied agro climatic conditions. Rising incomes, changing food
habits leading to tremendous scope in terms of variety of product that can be put on
self. So, retail will provide the strong local production and consumption
base.moreover, pre and post harvest technology can help reduce wastages and save
cost.
10
FDI in retail could fuel Food processing industry. it will provide for much needed
technical know how to farmers which the established retailers across the world will
bring along with them when they open shops in the country.foriegn retail giants are
willing to buy 30 billion dollars worth of processed food from the country. According
to study country could attract 1.5 to 2 lakh crore in 10 years time if it opens door to
FDI in retail.
OBJECTIVES
 Determining the various issues that are influencing food production and
distribution.
 Measuring current supply chain and impact of organized retail on food

processing industry.
 Identify the key factors that farmers and food processors should reap through
organized retailers.
 Measuring the role of govt. in enhancing investment in food processing

sector.
11
PROBLEMS IN INDIAN FOOD PROCESSING SECTOR:
1 Indian production and consumption centers are widely dispersed.

As a result actual cost of transportation becomes much higher due to long
supply chain with inadequate cold storage facilities for perishable products.
2 India’s supply chain for perishable is characterized by extensive wastages and

poor handling. The wastages occurs because of multiple point of manual
handling, inadequate packaging and temperature control and lack of cold
storage network both in term of storage, processing and transportation.
3 Production of raw material being relatively unorganized, seasonal and spatially

disbursed.
4 The supply chain is long because of number of intermediaries due to which

farmer will not be able to get due for their produce
.
5 Value additions in terms of sorting, grading, storage and bulk handling
facilities are very less due to lack of capital and experience in food
retailing.
6 The reason for such a distress selling are(1)lack of direct linkages with
market(2)lack of processing facilities.
7 Ineffective marketing channels.
12
WHY INVEST IN INDIAN FOOD PROCESSING SECTOR?
• Due to its diverse agro-climatic conditions, it has a wide-ranging and large

Raw material base suitable for food processing industries. Presently a very
Small percentages of these are processed into value added products.
• It is one of the biggest emerging markets, with over 900 million populations
And a 250 million strong middle class.
• Rapid urbanization, increased literacy and rising per capita income, have all
Caused rapid growth and changes in demand patterns, leading to tremendous
new opportunities for exploiting the large latent market. An average Indian
Spends about 50% of household expenditure on food items.
• Demand for processed/convenience food is constantly on the rise.
• India's comparatively cheaper workforce can be effectively utilized to setup

Large low cost production bases for domestic and export markets.
• Liberalized overall policy regime, with specific incentives for high priority food
Processing sector. No industry license is required for food processing industries.
• Very good investment opportunities exist in many areas of food processing

Industries, the important ones being: fruit & vegetable processing, meat, fish
& poultry processing, packaged, convenience food and drinks.
• Exclusive Agri Export Zones set up for end to end development for export of
Specific products from geographically contiguous areas
• Setting up of food parks to enable food and beverage units to use capital
Intensive facilities, such as cold storage, warehouse, quality control labs,
Effluent treatment plant etc
13
• Agro based 100% Export Oriented Units allowed sales up to 50% in Domestic
market
• Presence of virtually all major multi-national companies like Coca-Cola,

Pepsi,Britannia, DANONE, Nestle, Cadbury, Lever's Kellogg’s, Heinz,
International Best Foods Walls, Perfetti, Van Melle, etc
In a developing country like India a large chunk of consumer expenditure is on

basic necessities, especially food related items. A recent study by KSA Technopak
India Pvt. Ltd. has revealed that food and beverages still gets the major chunk of
the total consumer spending in India followed by clothing and footwear.
Sector wise Indian Consumer Expenditure:
S.No. Sector Share of Consumer spending in India:
1 Food and beverages 52 percent

2 Cloth & footwear 11 percent
3 Entertainment 3 percent
4 Consumer durables and furniture 7 percent
5 Health care 2 percent
6 Housing 9 percent
7 Others 16 percent
14
FOREIGN DIRECT INVESTMENT IN FOOD PROCESSING
SECTOR
The Indian food processing market is one of the largest in terms of production,
consumption, and export and import prospects. Since, India is one of the major
food producers worldwide, with new reforms ruling the roost, it encourages
commercialization. The country's food processing market is opening up to a wide
range of investors across the globe. In fact, in the last decade, India moved from an
era of scarcity to surplus, in the area of food production. Consequently, analysts are
of the opinion that the Food Processing Industry in India is on an assured track of
growth and profitability over the next five years. It is also estimated that food-
processing market in India will attract a phenomenal investment, in the form of
capital, human, technological, and financial, of over US$32.1 million by 2010.
15
RESEARCH DESIGN
The research design followed during the course of research work was-
Exploratory research:
• To study and gain the knowledge about the current supply chain in the food
processing industry and the shortcomings which it is facing.
• We have done pilot study on retailers and their processors. Our focus group includes
Farmers, Retailers and Processors.
• To study problem faced by the retailers and the farmers during supply chain we have
conducted the focus group interview.
Descriptive Research:
After going through the EXPLORATORY REASEARCH, the research process

was advanced with the help of DESCRIPTIVE RESEARCH, which was
followed in the following manner:-
• Designing and developing if questionnaires for both the retailers and

farmers.
• Collection of data and information with the help of these questionnaires.
• Cross sectional study been done to explore the impact of organized retail on
food
Processing industry.
• Evaluation and analysis of data as per the objectives of the research.
16
• Final conclusion & recommendation as per the analysis
METHODOLOGY
POPULATION DEFINITION
The population or the parameter considered for the research purpose covers:-
• Farmers both big and small dealing in different types of crops.
• Retailers especially grocery stores which can be called as organized

retailers.
• Some of the experts of the specialized areas have also been interviewed to
know the expert opinion.
SAMPLE PLAN
The selection of the samples is done through following sampling technique:
SAMPLE PLAN
PROBABILITY SAMPLING NON-PROBABILITY

SAMPLING
17
SIMPLE JUDGMENT
RANDOMSAMPLING SAMPLING
SAMPLE SIZE:
Retailers- 15
Farmers- 20
SAMPLE LOCATION:
• Selected retail grocery stores in Delhi & NCR region.
• Farmers interviewed are from Surajpur, Noida & Kasna.
DEVELOPMENT OF SURVEY QUESTINNAIRE:
The development of survey questionnaire took place in two phases:-
Initial phase – At this phase the questionnaire were designed using various tools
and techniques as per the research objectives and gone through the pilot testing.
Final phase – At this phase the final questionnaire were designed after making
necessary corrections in previous questionnaire introduced through pilot testing.
COLLECTING THE DATA:
Collection of data from retailers and farmers was done with the help of
QUESTIONNAIRE.
RESPONSE RATE:
As per the number of retailers and farmers contacted the response rates were:-
18
Retailers:
No of retailers contacted Response No Response

18 15 03
RESPONSE RATE: 83.33%
Farmers:
No of farmers contacted Response No Response

24 18 06
RESPONSE RATE: 75%
STATISTICAL TECHNIQUES USED:
Statistical tools used are:

• Mean
• Mode
• Standard Deviation
19
ANALYSIS OF RESULT
Profiles of samples
Retailers -:
The retailers selected by us as a sample were among the major retailers of India,
dealing either in apparel or in grocery. These retailers belong to major
business units of India, which are -:
• Future group
• Reliance group
• Subhiksha
• Birla’s group
etc
Farmers -:
The farmers selected by us as a sample from from different locations of DELHI

&NCR. They were operating on both low and high level of production.
20
ANALYSIS OF RETAILERS RESPONSE
List of Retailer
7% 6% BIG BAZAR
RELIANCE FRESH
7% 6%
SPENCER'S
MORE
7% 6%
BIG APPLE
SUBHIKSHA
7% 6% VISHAL
SABKA BAZAR
SALSAR RETAIL
7% 6% 6 TEN
MOTHER DAIRY
SAFAL
7% 7%
DOLLAR STORE
7% 7% GUPTA STORE
7% MITTAL STORE
• Response received from 15 retailers

• Sample collected from NCR
• Non-probability judgement sampling is considered
• No response by three retailers (Kendriya Bhandar,KB’S,DMS)
• Response rate is 83.33%
• Full contribution and equal participation by each retailer@9%
21
1. From where are you procuring your inventories ?
7% 13%
farmers
vendors
agents
27%
warehouse
46%
noresponse
7%
• To determine the procurement source for retailer

• highest response rate is warehouse
• second highest is vendors
• overall results reflect 50% of the retailer are procuring from warehouses
• Nominal scaling technique is used
• Mode is used as a statistical tool(4)
22
2. Do you think Tie-ups between farmers and retailers will help in controlling
black marketing and inflation?
0%
20%
stronglyagree
somewhatagree
somewhatdisagree
stronglydisagree
noresponse
80%
• To know the retailers opinion about tie-ups between them & farmers
• Single item balanced scaling technique is used
• Most of the retailers are agreed with the advantages of tie-ups
• Response rate is 100%
• Mode is used as a statistical tool(1)
23
3. Do you think by helping the farmers, Retailers are ultimately helping
themselves?
0%
27%
somewhatagree
stronglyagree
somewhatdisagree
stronglydisagree
noresponse
73%
• To determine how much are retailers ready to help farmers in term of

production and distribution.
• Most of the retailers are agreed with the statement asked to them to give
their opinion
• Mode is used as a statistical tool
24
4. Don’t you think decentralized buying is better than the centralized buying?
0%
20%
27%
stronglyagree
somewhatagree
somewhatdisagree
stronglydisagree
noresponse
26%
27%
• To take the retailer’s opinion about centralized or decentralized buying

• Approx equal number of retailer is in favors of cent. & decent. Buying.
• 100% response rate
• Mode=2
25
5. Do you think In-house processing facility will improve product line and
productivity for retailers?
13%
0%
0%
33%
stronglyagree
somewhatagree
somewhatdisagree
stronglydisagree
noresponse
54%
• To know the retailers opinion about In-house processing facility

• Majority of the feels it could improve product line & productivity
• Mode = 2
26
6. Which market do you think is having maximum opportunities?
0%
13%
rural
urban
semiurban
87%
• To determine which market they would see has maximum opportunities

• 87% of the retailers feels urban middle class market has the maximum
opportunities to explore
• Comparative scaling(constant sum) technique is used
• High response in favor of urban market 87%
• Mode = 2
27
7. Where do you think the maximum investment needs to be done?
7% 0%
0%
40%
storage
transportation
processing
coldstorage
noresponse
53%
• To know which factor of supply chain they think needs maximum

investment
• Highest response rate for the transportation (53%)
• Second highest is for cold storage (40%)
• Outcome is that the transportation needs more attention than other factors
• Mode = 2
28
8. Do you think growing need of quality food will ultimately push food
processing sector?
0%
40%
stronglyagree
somewhatagree
somewhatdisagree
stronglydisagree
60% noresponse
• To take the retailer’s opinion about relationship between quality food and
food processing sector
• Majority of the retailer(60%) feels demand of quality food is certainly going
to push food processing sector
• 100% response rate is received
• Mode = 1
29
9. Which strategy do you think is best for retailers?
14
12
10
no of reatilers
8
Series1
6
0
pushoriented pulloriented
• To know which strategy they are going with i.e. demand oriented or
marketing oriented
• Most of the retailers are going up with push oriented strategy i.e. pushing the
customer to buy the product
• Mode = 1
30
10. Do you think packaged food industry has huge scope of improvement both in
term of product and market?
0%
stronglyagree
47% somewhatagree
somewhatdisagree
53% stronglydisagree
noresponse
• To determine what the retailers think about food processing industry and its
market
• Almost all of the retailers feels food processing industry needs lots of
improvement
• Mode = 1
31
ANALYSIS OF FARMERS RESPONSE
6% 6% far1
6% 6%
far2
far3
6% 6%
far4
far5
6% 6% far6
far7
far8
6% 6% far9
far10
far11
6% 6% far12
far13
far14
6% 6% far15
far16
6% 6%
far17
6% 6%
far18
• Response received from 18 farmers

• Sample collected form NCR
• Non probability judgement sampling is used
• No response from 6 farmers
• Full contribution and equal participation by each farmer@6%
32
1. Which according to you is the most critical factor affecting post harvesting
process?
0%
11%
22%
cold storage
warehouse
transportation
valuaddition
no respose
45% 22%
• To determine the most important factor after harvesting or production

• Majority of the farmers takes transportation as the critical factor
• High response is 45%(transportation) & lowest is value 11%(addition)
• Mode = 3
33
2. Do you think current supply chain needs to be vastly improved?
0%
33%
storngly agree
somewhat agree
somewhat disagree
stornglydisagree
no response
67%
• To take the farmers opinion on current supply chain

• 100% response rate is achieved
• Majority of the farmers are in the favor of improvement of current supply
chain
• Mode = 1
34
3. Do you think direct dealing between farmers and retailers will reduce price and
wastages?
0%
0%
17%
strongly agree
somewhat agree
somewhat disagree
55% strongly disagree
no reponse
28%
• To know what the farmers think about their dealing with retailers
• 100% Response rate
• Around 50% are in the strong favor of direct dealing with retailers
• 11% of the farmer feels otherwise
• Mode = 1
35
4. Do you satisfy with the efforts being made by Govt in improving food
production and distribution?
6%
17%
don't like
0%
somewhat like
49% very much like
excellent
no response
28%
• To know whether they like the efforts being made from the side of the Govt
• Half of the respondent do not satisfy the efforts by govt
• 17% said govt is doing excellent
• 6% have no response
• Mode = 1
36
5. Do you think technology can be helpful in increasing agro output?
0%
28%
strongly agree
somewhat agree
somewhat disagree
strongly disagree
no reponse
72%
• To know the farmer’s opinion about use of the technology in agriculture

• Most of the farmers are of the view that technology is certainly a helpful
factor in agro processing sector
• Mode = 1
37
6. Do you have sustainable or continuous demand for your product?
12
10
10
8
no of retalers
Series1
6
Series2
4 4
4
0
yes no somewhat
• To know the demand pattern for the product of farmers

• 61% of the farmers said they have continuous demand for their product
• 22% have no response
• Mode = 2
38
7. Do you think their should be a integrated cold storage and processing facility for
farmers and retailers
0%
0% 6%
17%
strongly agree
somewhat agree
somewhat disagree
strongly disagree
no reponse
77%
• to know the farmers opinion about integrated cold storage and processing
facility
• Most of the farmers were in favor of integrated food processing facilities
• Mode = 1
39
8. Do you think less number of intermediaries will help both farmers and
retailers?
0%
17%
strongly agree
somewhat agree
somewhat disagree
strongly disagree
no reponse
83%
• To know the farmers opinion about intermediaries In supply chain

• 83% of the farmers feels more intermediaries
• will reduce price for both them and retailers
• mode = 1
40
9. Which strategy do you prefer while production?
14
12
12
10
NO OF RETAILERS
8
Series1
6
6
0
PUSH(produce & sell() PULL(food on demand)
• To know whether farmers are going with pull or push oriented strategy
• Most of the farmers(66%) were going with push oriented strategy
• Mode = 2
41
10.Do you think big retailers will provide farmers technical know-how of
production and distribution?
5% 0%
18%
strongly agree
somewhat agree
somewhat agree
somewhat disagree
59% strongly disagree
18%
• To take their view on help that retailers can provide them

• 100% response rate is achieved
• Around 60% of the farmers were strongly agreed to the statement
• Mode = 1
42
LIMITATION OF THE STUDY
As per the area of research undertaken the collection of the date and the
information is done with in the prescribed set of rules and direction & as per the
objectives of the research project, but still there are some aspects which were not
possible to be considered or followed in order to make this research flawless, and
therefore these aspects had turned into limitations of the study which are as
follows-
• Limited time period to cover the entire concept and take feedback from larger
sample in order to get more accurate result.
• Non-cooperation of the retailers & farmers in sharing information about their

procurement, processing and production process.
• The data collected is not representing all the farmers operating outside the NCR
Region.
• The research paper and the case study analyzed were not having sufficient
information about actual impact of organized retail on food industry although it
is improving supply chain.
43
CONCLUSIONS AND RECOMMENDATION
CONCLUSIONS
The overall conclusions derived after conducting the research on “MEASURING

IMPACT OF ORGANISED RETAIL ON FOOD PROCESSING INDUSTRY”
are-
• Both Retailers and Farmers feels they are supplement to each other and can
achieve lots of good things if they tie-up hands with each other.
• Both Retailers and Farmers said that current supply chain of food product needs
to be vastly improved especially in terms of transportation & warehousing.
• Organized Retail can definitely boost the food processing industry but it would
require lots of efforts from the side of Govt also.
• Both Retailers and Farmers are going with push oriented strategy i.e. pushing
the product into the market
• Both Retailer and Farmers wants direct dealing with each other with less no of
intermediaries to reduce price and wastages.
44
RECOMMENDATIONS
As per the major findings & conclusions derived through this research
recommendation regarding strategies, planning & major aspects of supply chain
can be draws as-:
• Retailers should extend their helping hand first to the Farmer because they are
the ones who provide the market to the Farmer and can guide the farmers to
produce right product at the right time.
• Retailers should go for contract farming technique to provide Farmers with

continuous demand for their product and to avoid wastages & reduce price for
both retailer and consumer.
• Govt should comes out with the helping hands for both farmers and retailers as
organized retail is still at the adolescent stage and it has lots of potential to
improve.
• In term of strategy Retailers and Farmers should go for demand oriented

strategy to have maximum consumption of their produce.
45
Footwear Design & Development Institute
IMPACT OF ORGANIZED RETAIL ON FOOD PROCESSING INDUSTRY
QUESTIONNAIRE
NAME: AGE: SEX:
CONTACT NO: LOCATION:
1. Which according to you is the most critical factor affecting post harvesting process?
Cold storage Ware house Transportation Value addition
2. Current supply chain needs to be vastly improved.
Strongly Somewhat Somewhat Strongly

agree agree disagree disagree
3. Direct dealing between farmers and retailers will reduce price and wastages.

46
4. Do you like the efforts being made by govt.in improving food production and
distribution?
Don’t like Somewhat like Very much like excellent

6. Do you having a sustainable or continuous demand for your product?

7. They should be a integrated cold storages and processing facility for farmers and
processors.

8. Less no. of intermediaries will help both farmers and retailers.
47

a) Food on demand (pull) b) Produce & sell (push)
10. Big retailers will provide farmers technical know-how of production and distribution.
48
Footwear Design & Development Institute
IMPACT OF ORGANIZED RETAIL ON FOOD PROCESSING INDUSTRY
QUESTIONNAIRE
NAME: AGE: SEX:
CONTACT NO: LOCATION:
11. From where are you procuring your inventories?
Farmers Vendors Agents Ware houses
12. Tie-ups between farmers and retailers will help in controlling black marketing and
inflation.
13. By helping the farmers, retailers are ultimately helping themselves.

49
14. Decentralized buying is better than centralized buying.

15. In house processing facility will improve product line and productivity for retailers.


a) Rural b) Urban c) Semi urban
17. The factors where the maximum investment need to be done are :
Storage Transportation Processing Cold storage
18. Growing need of quality food will ultimately push food processing sector.


a) Push oriented b) Pull oriented
50
20. Packaged food industry has a huge scope of improvement both in term of product and
market.

51
FREQUENCIES OF RETAILER’S QUESTIONNAIRE
Frequenc Valid Cumulative

y Percent Percent Percent
Valid BIG BAZAR 1 5.6 6.7 6.7
SUBHIKSHA 1 5.6 6.7 13.3
SALASAR 1 5.6 6.7 20.0
REL FRESH 1 5.6 6.7 26.7
6TEN 1 5.6 6.7 33.3
MORE 1 5.6 6.7 40.0
SPENCER'S 1 5.6 6.7 46.7
SABKA BAZAR 1 5.6 6.7 53.3
BIG APPLE 1 5.6 6.7 60.0
MOTHER
1 5.6 6.7 66.7
DAIRY
SAFAL 1 5.6 6.7 73.3
VISHAL 1 5.6 6.7 80.0
DOLLAR
1 5.6 6.7 86.7
STORE
GUPTA 1 5.6 6.7 93.3
MITTAL 1 5.6 6.7 100.0
Total 15 83.3 100.0
Missing System 3 16.7
Total 18 100.0
Retailers
ETAILERS
52
N Valid 15
Missing 0
Mean 1.2000
Std. Error of Mean .10690
Mode 1.00
Std. Deviation .41404
1. Do you think Tie-ups between farmers and retailers will help in controlling
black marketing and inflation?
Frequencies

53
Valid Strongly agree 12 80.0 80.0 80.0
somewhat agree 3 20.0 20.0 100.0
Total 15 100.0 100.0
Statistics
2. From where are you procuring your inventories?
Statistics
N Valid 15
Missing 0
Mean 2.5333
Mode 4.00
Std. Deviation 1.40746
54
Frequencies

Valid missing 1 6.7 6.7 6.7
farmers 3 20.0 20.0 26.7
vendors 4 26.7 26.7 53.3
agents 1 6.7 6.7 60.0
4.00 6 40.0 40.0 100.0
Total 15 100.0 100.0
3. Do you think by helping the farmers retailers are ultimately helping themselves?
Statistics
Valid 15
Missing 0
Mean 1.2667
Mode 1.00
55
Frequencies

Valid strongly agree 11 73.3 73.3 73.3
Total 15 100.0 100.0
4. Do you think decentralized buying is better than centralized buying?
Statistics
N Valid 15
Missing 0
Mean 2.6000
Mode 2.00(a)
56
Frequency

somewhat disagree 4 26.7 26.7 73.3
strongly disagree 4 26.7 26.7 100.0
Total 15 100.0 100.0
5. Do you think in-house processing facility will improve product line and
productivity for retailers?
Statistics
N Valid 15
Missing 0
Mean 1.4000
Mode 2.00
57
Frequency

Valid Missing 2 13.3 13.3 13.3
strongly agree 5 33.3 33.3 46.7
Total 15 100.0 100.0
Statistics
N Valid 15
Missing 0
Mean 2.1333
Mode 2.00
58
Frequency

Valid Urban 13 86.7 86.7 86.7
semi urban 2 13.3 13.3 100.0
Total 15 100.0 100.0
7. In which sector do you think maximum investment needs to be done?
Statistics
Valid 15
N Missing
0
Mean 1.7333
Mode 2.00
Frequency
59
Valid storage 6 40.0 40.0 40.0
transportation 8 53.3 53.3 93.3
cold storage 1 6.7 6.7 100.0
Total 15 100.0 100.0
8. Do you think growing needs of quality food will ultimately push food
processing sector?
Statistics
N Valid 15
Missing 0
Mean 1.4000
Mode 1.00
60
Frequency

Total 15 100.0 100.0
Statistics
N Valid 15
Missing 0
Mean 1.1333
Mode 1.00
61
Frequency

Valid push 13 86.7 86.7 86.7
pull 2 13.3 13.3 100.0
Total 15 100.0 100.0
10. Don’t you think packaged food industry has a huge scope of improvement both
in term of product and market?
Statistics
N Valid 15
Missing 0
Mean 1.4667
Mode 1.00
62
Frequency

Total 15 100.0 100.0
Cumulative
Frequency Percent Valid Percent Percent
Valid farmer1 1 5.6 5.6 5.6
farmer2 1 5.6 5.6 11.1
farmer3 1 5.6 5.6 16.7
farmer4 1 5.6 5.6 22.2
farmer5 1 5.6 5.6 27.8
farmer6 1 5.6 5.6 33.3
farmer7 1 5.6 5.6 38.9
farmer8 1 5.6 5.6 44.4
farmer9 1 5.6 5.6 50.0
farmer10 1 5.6 5.6 55.6
farmer11 1 5.6 5.6 61.1
farmer12 1 5.6 5.6 66.7
farmer13 1 5.6 5.6 72.2
farmer14 1 5.6 5.6 77.8
farmer15 1 5.6 5.6 83.3
farmer16 1 5.6 5.6 88.9
farmer17 1 5.6 5.6 94.4
farmer18 1 5.6 5.6 100.0
Total 18 100.0 100.0
FREQUENCIES OF FARMERS QUESTIONNAIRE
Frequency of Farmers
63
1. Which according to you is the most critical factor affecting post harvesting
process?
Statistics
N Valid 18
Missing 0
Mean 2.4444
64
Mode 3.00
Frequency

Valid cold storage 4 22.2 22.2 22.2
warehouse 4 22.2 22.2 44.4
transportation 8 44.4 44.4 88.9
value
2 11.1 11.1 100.0
addition
Total 18 100.0 100.0
2 Do you think current supply chain needs to be vastly improved?
Statistics
current supply chain needs to be vastly improved

N Valid 18
Missing 0
Mean 1.3333
Mode 1.00
65
Frequency
Cumulative
Frequency Percent Valid Percent Percent
Total 18 100.0 100.0
3 Don’t you think direct dealing between farmers and retailers will reduce price and
wastages?
Statistics
N Valid 18
Missing 0
Mean 1.6111
Mode 1.00
66
Frequency

somewhat disagree 3 16.7 16.7 100.0
Total 18 100.0 100.0
4 Do you like the efforts being made by govt in improving food production and
distribution?
Statistics
N Valid 18
Missing 0
Mean 1.7222
Mode 1.00
67
Frequency

don't like 9 50.0 50.0 55.6
somewhat like 5 27.8 27.8 83.3
excellent 3 16.7 16.7 100.0
Total 18 100.0 100.0
Statistics
Valid 18
N Missing
0
Mean 1.2778
Mode 1.00
68
Frequency

Total 18 100.0 100.0
6 Do you have a sustainable or continuous demand for your product?
Statistics
N Valid 18
Missing 0
Mean 2.1111
Mode 2.00
69
Frequency

yes 2 11.1 11.1 16.7
NO 10 55.6 55.6 72.2
Somewhat 4 22.2 22.2 94.4
4.00 1 5.6 5.6 100.0
Total 18 100.0 100.0
7. Don’t you think there should be integrated cold storage and processing facility
for farmers and retailers?
Statistics
N Valid 18
Missing 0
Mean 1.1111
Mode 1.00
70
Frequency

strongly agree 14 77.8 77.8 83.3
Somewhat
3 16.7 16.7 100.0
agree
Total 18 100.0 100.0
8. Do you think less number of intermediaries will help both farmers and retailers?
Statistics
N Valid 18
Missing 0
Mean 1.1667
71
Mode 1.00
Frequency

Total 18 100.0 100.0
Statistics
N Valid 18
Missing 0
Mean 1.6111
Mode 2.00
72
Frequency

PULL(food on
5 27.8 27.8 33.3
demand)
PUSH(produce & sell) 12 66.7 66.7 100.0
Total 18 100.0 100.0
10. Don’t you think big retailers will provide technical know-how of production
and distribution to farmers?
Statistics
N Valid 18
Missing 0
Mean 1.3889
Mode 1.00
73
Frequency

strongly
1 5.6 5.6 100.0
disagree
Total 18 100.0 100.0
BIBLIOGRAPHY & REFERENCES
• Report of the APO multi country study mission on rural based food processing
industry held
In Tokyo, Japan
• Asian Productivity Organization 2004
• Web site of Ministry OF Food Processing Govt of India.
74
• News paper- Economic Times, HT
• Magazines- Retail images.
• Book – Marketing research by Naresh Malhotra, Levy’s-Weitz.
• Research papers on “Challenges of Retail” & Food Retailing
75

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MEASURING IMPACT OF ORGANISED RETAIL

ON FOOD PROCESSING INDUSTRY

A Research Report is submitted to the faculty of

SUBMITTED BY: SUBMITTED TO:

(51)Vijay Kumar Mr Shashank Mehra

Therefore our respectful faculty of Marketing Research “Mr. Shashank

Mr. Shashank Mehra

May 01, 2008

Section Title Page No.

3. Objective of the study 12

• A profile of the total sample 20

• Analysis of retailer response 21-31

7. Limitations of the study 43

8. Conclusion and recommendations 44

9. End matter (appendixes) 46-73

• Frequency tables 52-73

10. Bibliography & references 74

As per the area of research undertaken by us i.e..,” IMPACT OF

Major findings derived through farmers are:-

• Organized retail is acting as a catalyst for food processing industry right

Indian economy is growing at a rapid rate of 9% with that income level of

India with arable land of 184 million hectares.

India produces annually 90 million tones of milk (highest in the world)

India has 485 million livestock population (largest)

India produces 204 million tones food grain (third largest)

India produces 6.3 million tones fish (3rd largest),

Processed fruits & vegetable:

 Measuring current supply chain and impact of organized retail on food

 Measuring the role of govt. in enhancing investment in food processing

1 Indian production and consumption centers are widely dispersed.

2 India’s supply chain for perishable is characterized by extensive wastages and

3 Production of raw material being relatively unorganized, seasonal and spatially

4 The supply chain is long because of number of intermediaries due to which

7 Ineffective marketing channels.

• Due to its diverse agro-climatic conditions, it has a wide-ranging and large

• Demand for processed/convenience food is constantly on the rise.

• India's comparatively cheaper workforce can be effectively utilized to setup

• Very good investment opportunities exist in many areas of food processing

• Presence of virtually all major multi-national companies like Coca-Cola,

In a developing country like India a large chunk of consumer expenditure is on

Sector wise Indian Consumer Expenditure:

S.No. Sector Share of Consumer spending in India:

1 Food and beverages 52 percent

After going through the EXPLORATORY REASEARCH, the research process

• Designing and developing if questionnaires for both the retailers and

• Collection of data and information with the help of these questionnaires.

• Evaluation and analysis of data as per the objectives of the research.

• Farmers both big and small dealing in different types of crops.

• Retailers especially grocery stores which can be called as organized

The selection of the samples is done through following sampling technique:

PROBABILITY SAMPLING NON-PROBABILITY

• Selected retail grocery stores in Delhi & NCR region.

• Farmers interviewed are from Surajpur, Noida & Kasna.

DEVELOPMENT OF SURVEY QUESTINNAIRE:

The development of survey questionnaire took place in two phases:-

COLLECTING THE DATA:

No of retailers contacted Response No Response

RESPONSE RATE: 83.33%

No of farmers contacted Response No Response